The junction of Elston Hall Lane and Fordhouse Road in Bushbury was cordoned off throughout this morning after an armed man was reported to have fled the scene of a collision last night.
One man was taken to the hospital and two others were treated at the scene of the crash, which happened next to the old Woodbine Road at around 9.30pm.
Police searched the area after being told an armed person had fled from one of the cars and arrested a 21-year-old man nearby.
No gun was found but the junction, where Fordhouse Road and Wood Lane meet Three Tuns Lane and Elstone Hall Lane, remained closed until early this afternoon as officers continue to comb the area.
A white BMW with front-end damage and red Toyota Yaris with damage to the passenger side were left at the scene overnight but have now been recovered.
A West Midlands Police spokesman said: "We received a report of someone fleeing with a gun following a minor car collision in Whetstone Green, Wolverhampton, around 9.30pm yesterday.
"We've cordoned off part of the surrounding area for weapon searches to be carried out.
"No gun has been recovered at this stage but a 21-year-old was detained nearby on suspicion of possessing a weapon and remains in custody for questioning."
A West Midlands Ambulance spokesman said: ""One ambulance and a paramedic officer attended the scene. On arrival we discovered three patients.
"We treated a man for injuries not believed to be serious and transported him to New Cross Hospital for further assessment.
"Two further male patients were treated for minor injuries and discharged at the scene."
Anyone with information is asked to contact police quoting log number 4569 of July 2.